Thread Options
#2145234 - 09/07/17 08:45 PM HMDA: Whose Responsibility?
Kelsey D Offline
Platinum Poster
Joined: Aug 2006
Posts: 516
With the significant changes coming, I'm trying to make sure that we have HMDA responsibilities in the right place. What department at your bank is responsible for compiling the loan records onto the HMDA LAR, clearing quality/validity errors, performing any other clean-up that occurs after the fact, and submitting the LAR annually? Please include your LAR size (current or 2018 if you have an estimate) and whether or not you use software.

For example, our Compliance Department uploads files from each LOS into the HMDA software, clears quality/validity errors, geocodes, reviews and corrects common mistakes, and submits the LAR annually. I expect our LAR to be between 5000-6000 in 2018. I struggle with this structure because I feel that these are first line of defense functions that are being performed within the Compliance Department, which is the second line of defense. The Compliance Department audits HMDA. Opinions?
Don't make me say, "I told you so!" Sincerely, your friendly Compliance Officer.

Return to Top

HMDA Academy
#2145461 - 09/08/17 09:59 PM Re: HMDA: Whose Responsibility? Kelsey D
cgorham Offline
100 Club
Joined: Sep 2015
Posts: 120
We will probably be around 8,000 LAR entries this year. Our LOS does edit checks, geocoding, and rate spreads so we do not use separate HMDA software. Operations is responsible for entering all HMDA data including geocoding. They also do (or are supposed to do) edit checks on a loan level basis. Our QC, Internal Audit, and/or Compliance employees do a regular audit of the accuracy of the HMDA data on a small number of files to monitor for trending errors. Our Compliance department is responsible for scrubbing/batch edit checks (we do them at least quarterly), and producing/submitting the LAR.

At my previous employer (about 2000 LAR entries), one person in QC/Compliance did most everything for HMDA. We used Questsoft, but had internal reports for the most common errors (geocoding and GMI). He would run those regularly and either tell the Processing or Closing departments to go fix their errors, or do them himself. He scrubbed yearly in Questsoft.

I think the first line of defense is entering the information into the LOS correctly and having the coding set up to correctly pull the HMDA data points from that information (if it is not manually entered specifically for HMDA). However, with the data points that only exist because they are required for HMDA, it is always going to be a struggle to get Operations and Sales to put a solid effort into getting them right. For example, even though our Ops team is supposed to edit check each loan, I still had about 100 loans with edits on them when we did the Q2 batch check. So defiantly not perfect, but honestly better than I expected.

edit: fixed typo
Last edited by cgorham; 09/08/17 10:02 PM.
Return to Top
#2145489 - 09/11/17 01:07 PM Re: HMDA: Whose Responsibility? Kelsey D
Cheli Offline
Platinum Poster
Joined: May 2013
Posts: 919
My FI is not comparable to the 2 aforementioned, so this may be a moot response. My FI's LAR has been under 1,000 the past few years. My FI strategically staffed a compliance officer in a couple different departments, whom which are responsible for the monthly-to-quarterly audits, annual scrub, and then ultimately sending their individual department's LAR up to Compliance for submission. Frontline has not been involved in HMDA reporting for years (since TRID went into effect and the LOS pretty much failed us in HMDA reporting). So I have been inputting, auditing, and scrubbing my LAR on my own for a long time. Which will most likely have catastrophic results come 2018 reporting...but I have sent so many red flags and flare up to upper management, I can't say I didn't warn them.

So kudos to any compliance officer that is able to enforce a frontline defense. I am fighting hard for that support.

Return to Top
#2148634 - 10/04/17 04:44 PM Re: HMDA: Whose Responsibility? Kelsey D
Banker K, CRCM Offline
Gold Star
Joined: Jan 2010
Posts: 290
We are smaller too, like Cheli above. We have around 1,200 entries on our LARs in recent years.

We use QuestSoft's Compliance RELIEF, and within that, their HMDA RELIEF module for our LAR.
Our SM (Secondary Market) Quality Assurance officer is going to reconcile and export their files to the LAR/QS (QuestSoft) from their LOS, Encompass. The HMDA Screens are already completed by the processors after the loan is closed.
I (the Bank's Regulatory Compliance Analyst, part of Compliance & Operational Risk Management) reconcile and export our in-house files to the LAR/QS from our LOS, LaserPro. The HMDA Screens are already completed by the centralized Loan Doc area after the loan is closed.

Once files are exported, I will print the Error Report from QuestSoft for that month, and will clear or "ok" any errors.
I also review samples of our files on the LAR report each month (100% bank wide non-originated files, 100% in-house originated files, & 20% random sample of SM originated files).

Hope this helps. Good luck to everyone!
Compliance - A Painful Addiction

All comments are mine & should not be taken as legal advice.

Return to Top